1 in the United States District Court for the Eastern
Total Page：16
File Type：pdf, Size：1020Kb
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ROBERT WHITSITT and : THOMAS SHINE : : Plaintiffs, : CIVIL ACTION : v. : No. 11-7842 : COMCAST-SPECTACOR, L.P., : : Defendant. : MEMORANDUM OPINION Tucker, C.J. July 28, 2014 On November 14, 2013, this Court denied cross-motions for summary judgment filed by the parties in this matter. Presently before the Court is Defendant Comcast-Spectacor, LP’s Motion for Reconsideration or, in the Alternative, for Certification of Interlocutory Appeal and Stay (Doc. 49) of the Court’s November 14, 2013 Order, Plaintiffs’ Response in Opposition thereto (Doc. 51), and Defendant’s Reply (Doc. 52). For the reasons more fully set forth below, the Court grants Defendant’s Motion for Reconsideration and reverses its previous denial of Defendant’s Motion for Summary Judgment. I. FACTUAL AND PROCEDURAL BACKGROUND1 Robert Whitsitt (“Whitsitt”) and Thomas Shine (“Shine”) (collectively, “Plaintiffs”) bring this breach of contract action against Defendant Comcast-Spectacor, L.P. (“CSLP”). Whitsitt, a resident of Washington, was formerly the president of the Seattle Seahawks and the Portland 1 Plaintiffs have seen fit not to include a statement of facts in any of their briefings. As a result, this factual history is compiled from Defendant’s Motion for Summary Judgment and from an examination of the parties’ exhibits. To the extent a fact is disputed, the Court highlights the dispute by referring to each side’s evidence. 1 Trailblazers. Shine, a resident of Indiana, was until recently a senior vice president of Reebok International Ltd. and is currently an investor and entrepreneur operating in the sports industry. CSLP is a limited partnership organized and existing under the laws of Pennsylvania with its principal place of business in Philadelphia, Pennsylvania. CSLP was formed in 1996 to own and operate, inter alia, the Philadelphia Flyers, the Philadelphia 76ers (“Sixers” or the “Team”), and what is now known as the Wells Fargo Center (the arena where both teams play their home games) (Verification of Philip Weinberg in Support of Defendant’s Motion for Summary Judgment [Weinberg Verif.] ¶ 2.) Edward Snider (“Snider”) has served as CSLP’s Chairman or Chief Executive Officer since its formation. Philip Weinberg (“Weinberg”) is General Counsel to, and Vice President of, CSLP. On January 24, 2011, CSLP entered into an agreement with Shine and Whitsitt to pay them a two million dollar fee if Plaintiffs first introduced CSLP to the purchaser of the Philadelphia 76ers. (Weinberg Verif., Ex. 4.) CSLP sold the Philadelphia 76ers to an entity known as Sixers Holdco L.P. (“Sixers Holdco”) in a deal that closed on October 17, 2011. (Weinberg Verif. ¶ 3.) Plaintiffs admit that they did not introduce CSLP to Sixers Holdco, Joshua Harris (“Harris”), David Blitzer (“Blitzer”), or any investor in Sixers Holdco other than a single minority investor named Jason Levien (“Levien”) (Def.’s Mot. Summ. J., Ex. C; Shine Dep. 48:6 – 48:17.) Despite Levien’s limited involvement in Sixers Holdco, Plaintiffs requested payment from CSLP several days prior to the closing on the sale of the Sixers, claiming they had done all that was required of them to earn their fee. (Def.’s Mot. Summ. J., Ex. C4.) CSLP refused to make the two million dollar payment to Plaintiffs on the grounds that neither Shine nor Whitsitt had first introduced the purchaser of the Team to CSLP. (Pls.’ Mot. Summ. J., Ex. C.) This contractual dispute is the central issue before the Court. 2 A. CSLP’s Early Efforts to Sell the Team As early as 2006, CSLP began to investigate the possibility of selling the Philadelphia 76ers and engaged Galatioto Sports Partners (“GSP”) to assist in this effort. (Weinberg Verif. ¶ 4-5.) GSP provides advisory, lending, and investment services to the professional sports industry. CSLP specifically granted GSP the exclusive right to “identify opportunities” to divest the Team, to provide financial advisory services in connection with any sale, and to participate in negotiations of a sale transaction if requested. (Id. ¶ 5.) CSLP agreed to pay GSP a success fee equal to one percent of the value of the consideration (as defined in that agreement) CSLP received in a sale. (Id.) Without publicly advertising the Team or conducting an auction, GSP presented the Sixers to persons and/or entities it knew were potentially interested in acquiring a professional sports team. (Id. ¶ 6.) GSP also maintained and controlled access to a secure data room for each prospective purchaser containing confidential business and financial records of the Team. (Id.) During this process, interested parties typically obtained general information about the Team and then submitted a nonbinding offer detailing a general price range for the Team along with other terms and conditions. (Id. ¶ 8.) If an offer interested CSLP, the potential purchaser was given additional information and the purchaser would conduct in depth due diligence and negotiations. This was a slow process. (Id.) In the years following GSP’s engagement, CSLP participated in a number of significant negotiations with potential purchasers, but did not reach agreement on the terms of a sale of the Team. Included in these potential purchasers was Joshua Harris, the current controlling owner of the Sixers. (Id. ¶ 8.) Harris engaged in protracted negotiations with CSLP to purchase the Team during the second half of 2009 and into August 2010. (Id. ¶¶ 8-9.) Throughout his initial 3 negotiations with CSLP, Harris sought to attract potential co-investors to his bid, but CSLP prevented him from doing so. (Id. ¶ 10.) Ultimately, Harris submitted an official offer for the Team on June 8, 2010. (Weinberg Verif., Ex. 1.) That offer was rejected by CSLP. (Id.) Harris allegedly agreed to leave his offer “on the table” should CSLP change its position about co- investors and diligence expenses. (Id.) Plaintiffs dispute CSLP’s contention that, after June 2010, Harris was still actively negotiating to purchase the Team; rather, Plaintiffs assert that Harris did not again become interested in purchasing the Team until Jason Levein, under circumstances that remain in dispute, approached Harris about joining a purchasing group with Levien and Blitzer. (Levien Dep. 139:21 – 141:14; 191:1 – 24.) B. Plaintiffs Express Interest in Forming a Group to Purchase the Sixers Among several other competing bidders for the Sixers was a group led by Plaintiffs. Shine, a social acquaintance of Snider, first learned of CSLP’s desire to sell the Sixers in 2006. (Def.’s Mot. Summ. J., Ex. C; Shine Dep. 43:9 – 43:14.) In July 2008, Shine arranged a meeting with Snider in which Whitsitt, Shine, and Snider discussed the potential sale of the Sixers. (Def.’s Mot. Summ. J., Ex. B; Whitsitt Dep. 31:11 – 32:19.) Plaintiffs did not actively pursue a purchase of the Sixers following this meeting and they did not contact CSLP again until August 2010. In the spring of 2010, Shine held a series of conference calls during which he asked Levien if he and longtime player-agent Happy Walters (“Walters”) would be interested in investing in a group that would ultimately purchase the Sixers. (Def.’s Mot Summ. J., Ex. D; Levien Dep. 35:16 – 36:2; 37:9 – 37:13.) Levien and Walters expressed interest in the opportunity and in August 2010, Shine approached Snider with renewed interest in purchasing the Sixers. (Weinberg Verif. ¶ 12; Weinberg Verif., Ex. 2.) GSP officially identified Shine and 4 Whitsitt as potential purchasers at this point. After Shine and Whitsitt signed a non-disclosure agreement (“NDA”), they were provided with access to confidential team financials through the unique electronic data room maintained by GSP. (Weinberg Verif., Ex. 2.) In agreeing to the NDA, Shine and Whitsitt identified at least one other party as a potential group member to GSP, but did not specifically identify Levien or Walters as members of their group subject to the NDA. Neither Levien nor Walters signed a non-disclosure agreement with GSP or CSLP in August 2010. Despite the lack of an NDA, Levien reviewed the confidential documentation provided to Shine and Whitsitt as a member of a third-party investment group. (Def.’s Mot. Summ. J., Ex. D; Levien Dep. 58:21 – 59:11.) In addition, throughout September and October 2010, Plaintiffs advised GSP that they were analyzing information downloaded from the data room. However, Plaintiffs repeatedly advised that they would need more time to complete their analysis and extended the time frame within which they said they would submit an offer. Plaintiffs never did submit an offer. C. Shine and Whitsitt Introduce Levien to CSLP On November 4, 2010, Shine, Whitsitt, Snider, and Weinberg had a meeting in which Shine and Whitsitt offered to introduce CSLP to potential buyers of the Sixers. (Weinberg Verif. ¶ 14.) In return for the introduction, Shine and Whitsitt requested a fee if their potential buyers were to ultimately purchase the Sixers. CSLP was unwilling to agree to such a broad agreement, and specifically wanted to limit the scope of the agreement to purchasers who were completely new to the negotiations. (Def.’s Mot. Summ. J., Ex. C; Shine Dep. 125:22 – 126:4.) Both parties agreed upon the broad strokes2 of this agreement, but no deal was finalized during this 2 According to Shine, neither the fee nor the specifics were discussed during this initial meeting, only the general requirement for Shine and Whitsitt to “bring … new, fresh or fresh buyers to the marketplace.” (Shine Dep. 125:4 – 126:12.) 5 initial meeting. Despite the lack of a formal agreement, Shine and Whitsitt introduced Levien and Walters to Weinberg and CSLP for the first time later that day or early the next day. (Weinberg Verif. ¶ 15.) D.